Changing the world, one mobile phone at a time

The New York Times magazine this past Sunday took on a topic near and dear to Yankee Group's heart: "Can the Cellphone Help End Global Poverty?" And while it will take years before we know the answer, some of the data they cited was intriguing to say the least.

"Jan Chipchase and his user-research colleagues at Nokia can rattle off example upon example of the cellphone’s ability to increase people’s productivity and well-being, mostly because of the simple fact that they can be reached. There’s the live-in housekeeper in China who was more or less an indentured servant until she got a cellphone so that new customers could call and book her services. Or the porter who spent his days hanging around outside of department stores and construction sites hoping to be hired to carry other people’s loads but now, with a cellphone, can go only where the jobs are. Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move — displaced by war, floods, drought or faltering economies — can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. Over several years, his research team has spoken to rickshaw drivers, prostitutes, shopkeepers, day laborers and farmers, and all of them say more or less the same thing: their income gets a big boost when they have access to a cellphone."

"It may sound like corporate jingoism, but this sort of economic promise has also caught the eye of development specialists and business scholars around the world. Robert Jensen, an economics professor at Harvard University, tracked fishermen off the coast of Kerala in southern India, finding that when they invested in cellphones and started using them to call around to prospective buyers before they’d even got their catch to shore, their profits went up by an average of 8 percent while consumer prices in the local marketplace went down by 4 percent. A 2005 London Business School study extrapolated the effect even further, concluding that for every additional 10 mobile phones per 100 people, a country’s G.D.P. rises 0.5 percent."

[From "Can the Cellphone Help End Global Poverty?", New York Times Magazine, April 13, 2008]

The piece goes on to talk about the use of mobile transactions for micro-loans and micro-payments as a way to move money cheaply to people in poor countries, a topic covered in some depth here at Yankee Group last December in Patrick Monaghan's report Mobile Banking Lessons from International Low-income Initiatives. But regardless of whether its communication or transactions driving this boom, its nice to see the mainstream media recognizing the economic importance of ubiquitous connectivity. And for many of the next three million mobile phone users described in the article, that future can't come soon enough.

Cross-posted from blogs.yankeegroup.com